updated 06:05 pm EDT, Tue May 22, 2007

Internet radio reprieve

A record industry group that collects royalties from Internet and satellite radio, SoundExchange, has agreed to defer the royalty payments of smaller Internet stations. The US Copyright Royalty Board (CRB) has ruled that as of May 1st 2007 and retroactive to January 1st 2006, Internet broadcasters are eligible for paying much higher fees per song; since many stations operate on little or no profit, however, the ruling would effectively kill networks such as SomaFM.

Reuters notes that unfortunately for those affected, the deferment may only be temporary. "Although the rates revised by the CRB are fair and based on the value of music in the marketplace," says SoundExchange director John Simson, "there's a sense in the music community and in Congress that small Webcasters need more time to develop their businesses."

A spokesman for the SaveNetRadio Coalition, Jake Ward, also complains that the only pardoned radio stations are those earning less than $1.25 million per year. He argues that many companies earning even that amount are in a fragile state, and might be encouraged to deliberately sabotage their incomes to avoid royalties.

Over 80 members of the US Congress are supporting the Internet Radio Equality Act, which would render the CRB's decision null and void.